BLM Lease Sales, Revenues Drop in Third Quarter
The Bureau of Land Management’s third quarter lease sale for oil and gas development brought in a modest $20.5 million. The released numbers include the sale of parcels in nine western and four eastern states.
New Mexico and Wyoming led in September lease sales, bringing in $9.8 million and $8.3 million respectively. Revenue from the sales will be split with the states where development occurs, reports the BLM’s New Mexico office, which also handles lease sales in Kansas and Oklahoma. This is a marked decrease from the same period in 2018, when lease sales in New Mexico brought in more than $972 million, likely the result of pent up demand after Obama-era permitting restrictions.
With production setting new records this year, demand for new leases was low across the board. Quarterly lease sales in Utah raised $1.63 million for the sale of 63 parcels. The highest total bid was $194,560.
In Colorado, the BLM sold 49 parcels of approximately 42,149 acres for a total of $601,541. These numbers are down from last year’s sale of 20 parcels totaling 8,160 acres for $3,364,526 during the third quarter. Nevada, which has a smaller oil and gas industry, reported $38,601 in revenues. These revenues reflect a lack of demand for the parcels being auctioned. The Nevada BLM office reported that it received competitive bids for only 9,100 of the 32,300 acres offered.
No official BLM statement was released about lease sales in Montana and the Dakotas and the BLM did not respond to Western Wire’s request for additional information. According to sale result reported by Energy Net, the BLM sold leases for 7817 acres in this region for $342,700.
This quarter the BLM also released information about sales from BLM’s Eastern States Office, which received competitive bids on 30 out of 31 available parcels in Alabama, Mississippi, Louisiana, and Ohio. This brought in $1.4 million in bids and fees, which will be split between the federal and state governments.
The highest total bid in the eastern states was $301,080, paid by BOP Acquisition for a 119.6 acre parcel in the Wayne National Forest in Ohio.
The BLM issues leases to operators for a 10-year period, allowing them to explore and develop oil and natural gas resources. While developing the parcel, operators continue to pay development fees. Revenues from oil and natural gas production directly fund the U.S. treasury and also help states to pay for public education, infrastructure improvements, and other priorities.
During FY2018, generated a record $1.1 billion through 28 lease sales. This year’s receipts are expected to be much lower.